Business Conditions Survey – May report is available for download

Following three consecutive quarters of increase, the Business Confidence Index has retreated in the June quarter.

The three cost categories that businesses are most concerned about are insurance cost; taxes, levies and other government charges; and energy cost.

Interest rate concerns have returned despite no monetary policy changes since November 2023. Businesses are most worried about the impact of interest rates on customer spending and their profit margin.

The majority (62%) of businesses intend to maintain the same headcount in the next three months, while 21% plan to cut staff and 16% plan to hire additional staff.

46% of businesses have observed a decline in workers’ productivity. On the other hand, 10% of businesses have observed an increase in workers’ productivity and most of these businesses have invested in staff training.

Compared to staff members, business owners or managers are more receptive to adopting AI in business operations. The key motivation of AI adoption is cost savings, while the biggest concerns are privacy and a lack of in-house expertise.

The self-rated availability and reliability of access to telecommunications is notably lower for businesses outside of Sydney. This includes access to mobile phone services, broadband internet services, higher bandwidth business-specific services and data security support services.

To businesses across NSW, future investment (public or private) should prioritise energy reliability and cost. This is followed by transport infrastructure (for Sydney-based businesses) and housing availability (for regional businesses).